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Automakers face reality of EVs' cost — to jobs, and their bottom line

Related: We obsessively covered the Frankfurt Motor Show — here's our complete coverage FRANKFURT, Germany — European car bosses gathering for the Frankfurt auto show are beginning to address the realities of mass vehicle electrification, and its consequences for jobs and profit, their minds focused by government pledges to outlaw the combustion engine. As the latest such announcement by China added momentum to a push for zero-emissions motoring, Daimler, Volkswagen and PSA Group gave details about their electric programs that could give policymakers some pause. Planned electric Mercedes models will initially be just half as profitable as conventional alternatives, Daimler warned — forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs. "In-house production is almost irrelevant to the consumer," Daimler boss Dieter Zetsche told reporters on the eve of the Frankfurt Motor Show, in the midst of a German election campaign in which automotive jobs have loomed large. The company set a target of saving 4 billion euros ($4.8 billion) by 2025 to help fund the cost of its electric cars. "Daimler is the first company to state explicitly how much electric vehicles are going to hurt margins," said Bernstein analyst Max Warburton. "It was brave to go first — but of course it won't be the last." Volkswagen, for its part, said it was seeking new global supplier contracts to source 50 billion euros ($60 billion) of electric car content including batteries, which are not yet manufactured competitively in Europe. "A company like Volkswagen must lead, not follow," Chief Executive Matthias Mueller told reporters. VW diesel emissions-cheating exposed by U.S. regulators in 2015 triggered global public outrage, dozens more investigations into test-rigging by the wider industry and a push by some lawmakers to ban diesel and eventually all engines. TIGHTENING NOOSE Tesla shares jumped nearly 6 percent on Monday after a Chinese minister said it was a question of when, not if, Beijing bans fossil-fuel cars, tightening the noose around the combustion engine. France and Britain have promised its outright abolition by 2040. But PSA, the maker of Peugeots and Citroens, said it was concerned about the risks if consumers were left behind in the rush, and a new generation of battery cars does not sell.

Race recap: 2015 British Grand Prix is a testament to timing

In front of his home crowd, Lewis Hamilton actually had to work for pole position at the British Formula One Grand Prix. The World Champion couldn't get on top of the setup for his Mercedes-AMG Petronas on Friday, lapping behind teammate Nico Rosberg and the two Ferraris. Come Saturday, after a few alterations and a whole lot of wing to clamp down on understeer, Hamilton returned to his regular program at the front, taking pole position by just over a tenth of a second from his teammate. Williams, thought to be headed for another stretch in the weeds a few races ago, showed its best strength all year. The Grove team got both cars on the second row and in front of the Ferraris, Felipe Massa qualifying ahead of teammate Valtteri Bottas, but they were eight and nine tenths behind the Mercedes'. Kimi Raikkonen out-qualified Ferrari teammate Sebastian Vettel for the second time this year, and only the first time in a straight-up battle with two healthy cars. But more than a second behind the two cars at the front, and with two nearly-impossible-to-pass Williams' in front, neither the Finn nor the German is happy with where they are. Daniil Kvyat claimed seventh, his side of the garage at Infiniti Red Bull Racing having got through the weekend to that point without a single complaint about their Renault power unit. Carlos Sainz, Jr. put a single Toro Rosso inside the top ten in eighth position, ahead of Nico Hulkenberg who did the same for Sahara Force India by slotting in ninth. The second Infiniti Red Bull driven by Daniel Ricciardo did have an unspecified engine complaint – his car kept "bleeding power" on the straights – but even so he managed to qualify tenth with his second-fastest lap. The stewards deleted his best lap because he ran three centimeters outside the track limits at Copse, an infraction that stung a few other drivers as well. Up in front, what would sting the Mercedes-AMG Petronas drivers the most was the start. That's when a dearth of grip struck both Hamilton and Rosberg, allowing Massa and Bottas to slide right up the middle between them and take the first two places. The leapfrogging was so surprising that it looked like the Mercedes drivers were giving the Williams drivers a head start. They diced through the first corners, Hamilton sliding past Bottas into second place halfway through the lap. And then the safety car reported for duty.

Mercedes-Benz working on S-Class EV in accelerated green car lineup?

With Mercedes-Benz bringing out coupe and plug-in hybrid versions of its S-Class sedan, the German automaker just may follow through with a battery-electric variant as well. That's what the company's Uwe Ernstberger told the folks at Top Gear during the Geneva Motor Show. And while he noted the company still needs to work in a larger-than-usual battery pack and was less than specific with details, he did envision an all-electric S-Class "in the future." Of course, rumors started bubbling about an EV S-Class as far back as 2011, so we'll see. Christian Bokich, department manager for product and technology communications for Mercedes-Benz USA, would not confirm anything about an electric S-Class, but he did give AutoblogGreen an official rundown of MB's upcoming green cars in the US, starting with the launch of the all-electric B-Class ED in July of this year in the ZEV states (launch details for other states are TBA, he said). An S-Class plug-in hybrid is coming in the first half of 2015, followed by a C-Class PHEV closer towards the end of that year in the USA. There is also a C-Class four-cylinder BlueTEC coming at some point in 2016. Until we get more concrete information about the possible S-Class EV, let's review what we know about the PHEV. Last September, Mercedes-Benz started showing off the plug-in hybrid S-Class, saying that it could go as far as 19 miles on electric power alone and had a preliminary fuel efficiency rating of more than 78 miles per gallon, using the more lenient European driving cycle. Earlier this week, Mercedes showed off its S-Class Coupe. That model's US version will have a twin-turbocharged V8 that kicks in 449 horsepower, a few more than the presumptive S-Class EV will have. Ernstberger also said Mercedes would join the ranks of automakers offering autonomous driving systems and mentioned the S-Class as being at the "top of the movement." He held his tongue when asked about the possibility of an S-Class cabriolet.